FSA

Flexible Spending Account

A flexible spending account (FSA) is a voluntary, employer-sponsored program for employees to save a
portion of their income, pre-tax, to be used to pay for qualified medical or dependent care expenses incurred
during their benefit plan year.

How it Works
Health and dependent care FSA plans give employees the opportunity to realize tax savings on medical and
daycare expenses through two separate pre-tax accounts.

Health FSA
The money employees contribute to their Health FSA can be used to reimburse themselves for eligible,
out-of-pocket health care expenses made for themselves and/or covered dependents. Accounts are
funded through payroll deductions. The employer determines the plan year and the maximum
contribution amount an individual may contribute to their health FSA during the plan year.

Dependent Care FSAs
A dependent care FSA is set up to reimburse an employee for their eligible, dependent care expenses.
Eligible expenses include dependent care expenses for children under age 13, a disabled spouse, and/or
a disabled relative or household member who depends on the account holder for at least half of his or
her support. Accounts are funded through payroll deductions. The IRS limits dependent care maximums
to $5,000 per year – $2,500 if the employee is married and filing separately.